This blog looks at news items and views and indicate the impact on the middle classes. The middle classes are over-taxed, over-worked and over-exhausted. Yet if they don't join hands and move, they will get more of the same treatment from the existing parties. This is a call for political action. This party may not yet be a political party.Its a party nevertheless to what is happening. And this party is ON!
There is now a linkedin group called Party for the Middle Classes

Thursday, July 24, 2014

I have just read an old paper of Alain Lipietz (1988) in order to understand what the Regulation Approach was all about. The
paper is an English translation of a lecture by Alain Lipietz in Denmark, given
in 1984!

Apart from the pleasure of reading Marxist vocabulary
which I had more or less ignored since my college days (1979-80), I was amazed
that the Regulation School had more or less identified the same problems and
come to the same solutions that are mentioned elsewhere in this blog. The regulation approach is
concerned with the way in which social relations are maintained and reproduced
despite and through their conflictual character. In any social relations, there
are sub-groups who are dominant and those who are not, and the latter would
like to change the rules of the game. The social procedures and authority structures
for the linked modification of norms are called forms of regulation. An example of the regulatory
approach would be to ask why the librarians of the University of Burgundy keep
accepting their working conditions (see previous blog) and don't revolt.

1.Managers are suffering more: the
conditions are worse on the floor where the managers sit. As a result, the people
at the bottom, on other floors, relativize their own situation and have a sentiment
that nothing can be done or at least, their own lot should be acceptable.

2.There is no syndicate leader who is
strong enough to make an issue of it.

3.The managers have the sentiment that
it is public money which is perhaps better rationed for other things.

4.Any revolution or strike may stop
the current benefits of a regular salary

5.The threat of not having a future
promotion

6.Most of the workers being women may
also play a role since women have a legacy of suffering.

Thus, accept for point 2,
which we may also need study, the discourse and reasoning which lead to
acceptance of conditions of being dominated, of having to accept conditions,
which many in the rest of France do not have to bear, would form the subject of
the Regulation Approach. There is a French law which allows people to stop work
if the inside temperature falls to below 12°C. Therefore, there is a limit
placed. But there is no French law on the maximum temperatures which have to be
supported.

Coming
back to Alain Lipietz, here is a summary of his overview of the problems
of the developed world (I'll skip the terminology sections). Remember, he is in
1984 !!!!

The Fordist model worked well for the
thirty Glorious years (1945-75) because productivity increases were matched by
wage increases which in turn led to consumption demand increases and profitability,
which led to capital accumulation and investments. Thus, a balance had been found
in the growth of returns to capital and to labor.

The cause of the Fordist crisis was that
productivity growth was reduced. This reduced profitability. This reduced
investments. This reduced employment. This reduced consumption.

One way out was to internationalize and
increase exports by setting up free trade zones such as the EU. But this internationalization
led to pressure on the wage rate. The constraints on growth of wages meant that
consumption of domestic goods fell (if imports went up). If all countries do
the same, in the hope of recovering from exports, it means all over EU wages
are not keeping up with productivity. This means inadequate consumption at the
EU level.

A second way out was to export the Fordist
model to other countries (NICs). They could then manufacture according to
Fordist models and import OECD capital goods. This Peripheral Fordism meant that the
problem was postponed by issuing Euro dollars: the Americans continued to
consume thanks to credit. There were minor gains in productivity in the US and
slowdown of capital accumulations. When credit stopped, the crisis emerged
because the NIC were no longer able to pay the high interest rates. So
monetarism was finally rejected and Reagan went back to Keynes: tax and defense
spending to bring the economy back. Household consumption went up.

A third hope is whether technology and new
innovation (in electronics) be able to raise productivity and profitability and
solve this problem? The problem is that profitability alone is not enough. It
has to be accompanied by mass consumption growth. This growth requires employment
and wage increases. Otherwise, the increased productivity will lead to some
well-paid skilled labor, others stagnant wage earners and increase in
unemployment.

This means that consumption will not
increase and recession will continue. One way would be to reduce the working
hours massively and modify the wage relation.

Can I say more? What it means is that if you have good workers who are
demonstrating productivity increases, and you are not increasing their
salaries, you are digging your own grave. Whether you distribute the wage
increases specifically to the person who performs or generally to all your
employees may involve other questions of motivation and management, but if you
keep the increased profit for yourself, you are undermining your own long-term
viability.

Another reminder
of Marx, remember the Communist manifesto… this time its 1848 …..

"The development of Modern Industry, therefore,
cuts from under its feet the very foundation on which the bourgeoisie produces
and appropriates products. What the bourgeoisie therefore produces, above all,
are its own grave-diggers."